Post-War Canada

Prosperity, Political Changes, Trudeau Era, & Economic

Challenges

Post-War Prosperity

• With the end of the war, people who had worked in war production industries faced losing their jobs

• Federal government wanted to manage the transition to a peace-time economy better than it had in World War I

• During the war, the provinces had transferred many powers to the federal government

• Prime Minister Mackenzie King wanted the federal government to keep these powers

• Ottawa could then increase or decrease government spending to respond to problems such as unemployment and inflation

• Provinces were not keen on this – did not want to give up their powers

• C. D. Howe, King’s Minister of Reconstruction, Trade, and Commerce recommended that private business, with the help of government incentives, handle the change to the peace time economy

• Companies received tax breaks to produce consumer goods and invest in new plants

• Crown corporations were sold off at low prices

• Factories began producing consumer goods such as appliances and cars

• Canada’s economy was booming

Social Programs

• Canadians got used to social programs such as unemployment insurance and family allowances during the war

• They wanted to see these programs continue after the end of the war

• Federal government faced with the problem of providing similar social programs in all parts of the country even in provinces which were not wealthy enough to provide them

“Equalization” or “Transfer” Payments

• Provinces would transfer taxation powers to federal government

• Federal government would then give grants to the provinces to provide social services such as education and health

• Federal government would also transfer to the poorer provinces some of the taxes collected in the richer provinces

• Through this arrangement, the federal government gained power over social programs

Economic Prosperity

• Post-war prosperity was driven by development of natural resources such as oil, metals, and other minerals

• Boom towns sprung up across the country

• Southern Ontario became the manufacturing centre of the country – 50% of nation’s plants and factories and 99% of automobile industry located there

Mega-projects

• Government spent money improving roads, sewer systems, power plants, schools, and hospitals

• Several megaprojects were undertaken

• 1950 – 1970 construction on the 7821 km Trans-Canada Highway – was longest national highway in the world

• St. Lawrence Seaway, which was a joint project between Canada and the United States, was started in 1954 and finished in 1959

• It linked the Great Lakes with the Atlantic Ocean

• Trans-Canada Pipeline – transport natural gas from Alberta to central Canada

American Investment

• Americans regarded Canada as a important source of minerals and other natural resources

• American investment continued to increase in Canada

• By 1968, 88% of the oil industry in Canada was U.S. owned

• U.S. branch plants continued to open here• U.S. companies controlled more than half of all

manufacturing in Canada• Some worried that Canada was becoming the

“forty-ninth state”

“Haves & Have-nots”

• Some Canadians were very successful businesspeople – built empires and employed a lot of people

• Examples: H. R. MacMillan in forestry, K. C. Irving in gas stations, forestry, and newspapers, Bronfman family’s Seagram liquor empire

• Many working poor toiled away at difficult jobs where they made little money

• Women were paid less than men even if they did the same work

• Some women who worked outside the home were also subject to criticism

Aboriginal Peoples

• Aboriginal people were especially disadvantaged

• Traditional territories polluted by resource industries

• Hunting grounds and way of life negatively affected by development of mines, highways, pipelines and boom towns

• Their average wages/salaries were less than half those of non-Aboriginal Canadians

• In 1963, life expectancy for Aboriginal females was 35 years compared to 64 for non-Aboriginal females; 33 for Aboriginal men compared to 61 for non-Aboriginal men

• 36% of Aboriginal people were receiving social assistance

• Housing was very sub-standard – many houses lacked running water, indoor baths, electricity, and sewer systems/septic tanks

Post-War Politics

• In 1949, Newfoundland became a part of Canada

• Mackenzie King, who had been in power longer than any other prime minister, retired in 1948

• Louis St. Laurent, a Quebec lawyer, replaced King as prime minister

John Diefenbaker

• New leader of the Progressive Conservative party in the late 1950s

• Was a lawyer before entering politics • German heritage – saw himself as a Prairie

populist who spoke for and listened to ordinary people

• Believed in “unhypenated Canadianism” – all Canadians are equal regardless of their ethnic background – this made him unpopular in Quebec

• Nationalist who was committed to preserving Canada’s ties to Britain and standing up to the Americans

• Championed human rights – introduced Canadian Bill of Rights

• Gave status Indians living on reserves the right to vote

Lester “Mike” Pearson

• Leader of Liberals appealed more to younger voters living in cities in Ontario and Quebec

• Believed in a Canada based on two founding peoples, French and English

• Felt that Canada’s ties to Britain would eventually be cut – Canada needed an identity that would be meaningful to the thousands of immigrants who had come here after WWII

• Introduced trial abolition of capital punishment and easier divorce laws

• Introduced new Canadian flag and improved social welfare system

Social Welfare

• Pearson’s government began Canada Pension Plan – improved existing pensions

• Introduced Canada Assistance Plan to help provinces pay for social assistance for people in need

• Also brought in medicare

Medicare

• Fight for a government-funded medical system began in Saskatchewan

• Before 1960s, families who were seriously ill could be financially devastated by doctor and hospital bills

• In 1962, Saskatchewan Premier T. C. “Tommy” Douglas brought in a complete medical program that allowed all people in his province to get medical treatment without paying directly out of their own pockets

• Saskatchewan doctors opposed Douglas’s plan

Medical Care Act

• Tommy Douglas left Saskatchewan and became the leader of the NDP in Ottawa

• Pearson’s Liberals thought they might lose votes to the NDP – so they added health care to their party platform

• National Medical Care Act was passed in 1966

• Federal and provincial governments would share the cost of medical care by doctors and hospitals for all Canadians

Canada’s Centennial

• Canada celebrated 100th birthday in 1967

• Expo 67 in Montreal

• Diefenbaker was defeated in a leadership convention of the Progressive Conservative party

• Pearson decided to step down as leader of the Liberals

Trudeau Era

• Pierre Elliot Trudeau became leader of the Liberal Party

• New kind of leader – glamorous and charismatic, drove a flashy Mercedes sports car, wore sandals and open-necked shirts, dated celebrities, and enjoyed performing for and joking with the media

• Canadians, particularly young people, immediately embraced Trudeau

• “Trudeaumania” swept the nation

“Just society”

• Trudeau believed that government had a responsibility to protect rights and freedoms of people

• Strong advocate of individual freedom – government should not interfere with people’s liberties

• Government should also work towards creating a more socially and economically just society

Social Movements

• Late 1960s was time of significant social changes

• As a result of the baby boom, more half of the population of North America was under 25

• Youth were into rock music, “psychedelic” fashion, long hair, sexual promiscuity, and experimentation with drugs – way to protest mainstream society

• Many youth took part in protests against the Vietnam War or got involved in the women’s, civil rights, and environmental movements

• Politicians responded by providing more money for work and activities for youth, lowering the voting age to 18, and lowering the legal drinking age to age to 18 also

Women’s Movement

• Feminism became a significant force• Many women started to reject the “restricted”

role of wife and mother that was deeply rooted in society in the post-war period

• In the workplace, many women were relegated to low-paying jobs such as waitresses, hairdressers, secretaries, and clerks

• Employers could legally discriminate against women in both wages and benefits

Royal Commission on Status of Women

• Federal government established Commission in 1967 to examine women’s place in Canadian society

• Commission put forward a number of important conclusions:

• Women should have the right to choose to work outside the home

• Society in general, as well as parents, should take responsibility for children; daycare services should be provided

• Women should be entitled to paid maternity leave from their jobs

• The federal government should do all it can to help overcome discrimination against women in society.

National Action Committee on the Status of Women (NAC)

• Formed in 1971

• It was a pressure group that lobbied both provincial and federal governments to act on the Royal Commission’s recommendations

• Was successful in having women’s equality guaranteed in the Charter of Rights and Freedoms

• Feminists in Canada wanted to see more women promoted to positions of responsibility in government, business, education, and the public service

• Challenged stereotypes of women and the kinds of work they do

• Pushed for more girls to pursue education in math and sciences

• By 1980s, more women were entering professions – medicine, politics, engineering, corporate management -- where they had previously been underrepresented

Environmental Movement

• In 1960s, there was growing public concern about the effect that industrial pollution was having on the environment

• Organizations were set up to pressure governments to bring in controls on industries

• Federal and provincial governments passed laws requiring that businesses show that their plants and projects would not harm the environment

• Car makers had to make their vehicles more fuel-efficient and less polluting

Greenpeace

• Started in BC in 1970 by a small group of activists who were concerned about nuclear bomb testing off the coast of Alaska

• Greenpeace members drove a small boat into the testing area and refused to leave until the test was cancelled

• Greenpeace is still active today and often uses dramatic methods to draw attention to environmental issues

Economic Challenges

• Early 1970s – oil and gas prices went up 400% overnight

• Led to inflation that lasted most of the 1970s – prices of products went up sharply, Canadian $ went down, businesses failed, and unemployment rose to its highest level since the Depression

• More dual-income families as women entered the work force

• Buying power of the average family had fallen for the first time since World War II

Regionalism

• Recession of the 1970s hurt the resource-based provinces the hardest – BC and Atlantic Canada – a lot of layoffs

• Western alienation became strong – Prairie provinces and BC believed that Ottawa favoured central Canada over them

• Ottawa responded to oil crisis by freezing the price of domestic oil and gas and placed a tax on petroleum exported from western Canada

• This made the province of Alberta very angry – Premier Peter Lougheed believed his province had the right to charge world prices for its oil

National Energy Program (NEP)

• To deal with unemployment and regional disparity, Trudeau government increased transfer payments to provinces to pay for social programs

• Spent millions on projects to help economic development, particularly in Atlantic Canada

• Brought in the National Energy Program

NEP’s Goals

• Reduce consumption of oil• Protect Canadians from rising oil prices• Make Canada self-sufficient in oil

• Program gave petroleum companies $ to drill for oil in the Arctic and off the coast of Newfoundland

• Tried to encourage people to switch from oil to gas and electric sources of energy

• Alberta reacted angrily

• By 1984, NEP was dismantled, but feelings of bitterness from the West lasted many years

Debt Crisis

• It was expensive to protect the economic well-being of Canada and to fund social programs

• The federal government began operating at a deficit – its expenditures were greater than its revenues

• It was spending more money than it was taking in

• It began borrowing money to pay for its programs

• By the time Trudeau left office in 1984, the federal debt was almost $160 billion

Mulroney and the Debt

• When he was elected in 1984, Prime Minister Brian Mulroney reduced taxes to stimulate the economy and cutting social programs.

• He also argued that the Free Trade Agreement would cause businesses to flourish and they would hire more people

• His plan did not work

• Canada was hit by a recession in 1990• Businesses went under and people lost their

jobs• More people needed welfare and unemployment

insurance• Debt increased and government had to increase

taxes• Conservatives were dealt a significant defeat in

the 1993 election – only two Conservative MPs won seats

Liberals and Debt

• When Jean Chretien’s Liberals came to power in 1993, they inherited a $466 billion debt

• In the beginning, they spent $6 billion on infrastructure projects (roads, bridges) to boost the economy

• A year later, interest rates went up, and federal finance minister Paul Martin announced that Canada could no longer afford “big government”

• Martin cut federal government spending to the tune of $25.3 billion over 3 years

• 40 000 federal government jobs were eliminated

• Transfer payments to provinces for post-secondary education, health, and welfare were cut substantially

• Subsidies to businesses were ended

“Tough Medicine”

• While federal government was achieving its goal, ordinary Canadians were hurt

• Universities and colleges had to raise tuition fees

• Cuts to health care – hospital wards closed, staff was reduced; RNs were replaced by aides with less training; hospital stays were shortened; people forced to go to US for treatment; people dying waiting for medical care

• Increasing numbers of poor – homeless and people relying on food banks

• Thousands of children growing up in poverty